CEO Pay and Employee Attitudes

What is it about?

Executive compensation gets an extraordinary amount of negative attention in the press. However, whether executive compensation has an impact on employee attitudes like job satisfaction had not previously been examined. Interestingly, we found that employee attitudes were positively related to CEO compensation when the compensation was performance-based (e.g., change in bonus), but negatively related when it was not (e.g., change in salary).

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Why is it important?

This is important because prior to this we didn't know whether CEO/executive compensation mattered to employees. We find there is a relationship, although sometimes it was positive and sometimes negative.